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Ask HN: Sell my startup for $14M because I can't raise $2M?

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Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#91

Post by justboxing »

weaksauce wrote: post #77
jonnathanson wrote: post #40

Earlier quoted context omitted.

"Even if you'd eventually make $50m, your life wouldn't change much from a net worth of $14m to $50m. You could buy a nicer jet?" I know you're kidding around here, but all kidding aside, whether your net worth is $14M or $50M, you can't afford a jet. (I mean, nominally speaking, you can front the sticker price -- but you'll get eaten alive on fuel and maintenance over the jet's useful lifespan, and the jet as an ass…

In a somewhat crude and related note. felix dennis (the week weekly magazine founder) once said, “If it flies, floats or fornicates, always rent it.” Not completely bad advice for most rich people that want to stay rich.

so Felix Dennis is the 'Old Wise Person' refereed to elsewhere in this thread with the same quote? Or is this another one of those quotes like the ones attributed to Einstein i.e. no-one know who said it.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#92

Post by jtraffic »

mrfusion wrote: post #53
jonnathanson wrote: post #40

Earlier quoted context omitted.

"Even if you'd eventually make $50m, your life wouldn't change much from a net worth of $14m to $50m. You could buy a nicer jet?" I know you're kidding around here, but all kidding aside, whether your net worth is $14M or $50M, you can't afford a jet. (I mean, nominally speaking, you can front the sticker price -- but you'll get eaten alive on fuel and maintenance over the jet's useful lifespan, and the jet as an ass…

Would a small helicopter make more sense?

Or this: https://www.iconaircraft.com/home

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#93

Post by weaksauce »

justboxing wrote: post #91
weaksauce wrote: post #77

Earlier quoted context omitted.

In a somewhat crude and related note. felix dennis (the week weekly magazine founder) once said, “If it flies, floats or fornicates, always rent it.” Not completely bad advice for most rich people that want to stay rich.

so Felix Dennis is the 'Old Wise Person' refereed to elsewhere in this thread with the same quote? Or is this another one of those quotes like the ones attributed to Einstein i.e. no-one know who said it.

It was in his book "how to get rich" or something similar to that title. Half memoir half advice. It's actually a pretty good read... title notwithstanding. I am not sure if he was he originator of that saying though.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#94

Post by erex78 »

zupreme wrote: post #47

Learn from my mistake. Unless you're already financially secure (meaning you could stop working and live your current lifestyle for several years) then my advice is to take the money while you can OR to leverage that valuation to pocket a few million $ (by selling equity). I'm doing great with my current startups now but several years ago I founded a very promising startup which almost immediately got many acquisitio…

There is a lot of advice on the thread saying: take the money. Given your personal situation etc. this may very well be the right choice.

But you need to realize that just because you've been approached for acquisition and even if somebody tells you straight up "we want to acquire you", it sounds like you are far away from actually getting acquired. The road from casual interest to money in the bank is long and bumpy.

Unless you actually have a term-sheet in your inbox, you aren't in the position to make this decision right now.

The right tactical approach is for you to push hard on both fronts - push as hard as possible on fundraising as if you have no other option. And if you do want to consider an acquisition, start approach these companies and ask for term sheet.

If both go well, then you have a decision to make.. (and more leverage..)

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#95

Post by askafriend »

rdlecler1 wrote: post #85

If you get your $400m exit you might own 5-20% ($10m - $80m) of the company at that time. At this point I assume you’re a large shareholder and so you need to price out what your time cost is. That’s a lot of money to take off the table and from then you’ll never have trouble raising another seed round. Do be careful though. Business development people are paid to scour a market and this could be a huge time suck wit…

This is an important point. Don't be strung along while you're burning through cash.

Make sure the $14m is concrete and not just based on numbers that have been floated in casual conversations.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#96

Post by brianwawok »

qaq wrote: post #63
brianwawok wrote: post #57

Earlier quoted context omitted.

So by Mr Money Mustache method, you look at the 4% rule. 1mm = 40k per year forever 2mm = 80k per year forever 3mm = 120k per year forever 4mm = 160k per year forever Pretty set with anything past 2mm in most of the US, maybe you would want 3 or 4 if you really like SF.

160K in SF right that will take you far

It will give you a place to live and food to eat without ever having to do work for money again?

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#97

Post by askafriend »

What does the cap table look like? Presumably you won't take the full $14m off the table even if the deal does go through (which is uncertain).

That context matters a ton when recommending a course of action. If you own 100% of the company that changes what I'd tell you compared to if you only owned 20%.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#98

Post by charlesdm »

nols wrote: post #31
austenallred wrote: post #11

A few things, though it's hard without much info (re: revenue/growth). Regardless: 1. A $14m sale is a huuuge win. You'd be set for life. A 100% likelihood of $14m is something that is difficult to turn down in almost any scenario. Even if you'd eventually make $50m, your life wouldn't change much from a net worth of $14m to $50m. You could buy a nicer jet? Let's say you take the $14m. Your life would (presumably) ch…

It's a team of people, so the $14MM wouldn't all go to a single person. It's certainly a lot of money, but it may not be retire in comfort money.

Bad assumption. Just because it's a team of people doesn't necessarily mean there is more than one shareholder. You can have one founder, and a few founding employees. Not everyone shares equity in a startup (at least outside of SV), and this is fine.

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#99

Post by woodylondon »

serious life lesson here. Unless you have a lot of money now, take the 14m and run! I am 40+ now, but at 23 I was offered £5m for a business. I tuned if down because I would have to wear a suit and goto a stuffy office in a 2-year lock-in. I turned it down and lost the lot. I was a total idiot looking back on it now. You are better to have something than nothing at all. With £14m you can come up with the next great idea, and you still have a few million left over!

Re: Ask HN: Sell my startup for $14M because I can't raise $2M?

#100

Post by christopherslee »

Keep in mind that you also can try to sell the company for more money if there's competition. Competition from other buyers, competition from investors. You probably want to try going down both roads to see how hard it is to sell or raise money. At that point you'll know more and you can feel more comfortable with the decision, whichever one you make.

Congratulations and best of luck!

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